It has recently been reported that Ed Miliband has been talking about the need for rent controls, and in particular has been arguing that private tenancies should last at least three years.
Rent controls have a poor reputation. They have been tried out in this country and elsewhere, and often with unfortunate results. They can for example diminish the supply of new housing, as private landlords are unwilling to invest in building projects when the returns they can enjoy on their investments are limited.
Nevertheless the situation as it stands is far from perfect. It is normally very difficult to rent a house or apartment from a private landlord. They usually demand an up-front fee while they decide whether or not to let you the property. This is normally non-refundable, and can easily exceed a week's salary. If you are turned down for one property, you might not have enough money left to pay another up-front fee.
It is common for private landlords to let properties only to people who are employed (which rules out the self-employed), who are in permanent employment (which rules out those on fixed-term contracts), and who earn at least thirty time the monthly rent. In addition, these rules normally apply to ALL adults in a given household (which rules out housewives and grown-up children still in the education system).
In addition to this, many private landlords refuse to let properties to people who smoke, and many private landlords refuse to let properties to people who own pets.
Even if you are lucky enough to secure a private tenancy, you might have to move after as short a time as six months. In fact you might have to move house every six months. It is therefore advisable to have only minimal possessions, which is awkward for a family with children.
It is unsurprising that large numbers of people in this country live in social housing. Of course there might be less demand for social housing if it were easier to own your own home, but that is impossible for many people. How can you afford to buy a house if you are either unemployed or working for the minimum wage?
There would also presumably be less demand for social housing if it were easier to secure a private tenancy, and if people with private tenancies tended to enjoy greater security.
In other words, maybe there is a case to be made for at least some state intervention in the private lettings market.
Related previous posts include:
Two hundred evictions
A large family versus private landlords
The story of King Ed
Is it legal to hate private landlords?
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